Survey paints rosy picture for RI cell phone industry

Survey paints rosy picture for RI cell phone industry

Zakki P. Hakim, The Jakarta Post, Jakarta

Good news for the domestic cellular telephone industry!
Nearly six million Indonesians -- over 1.5 times Singapore's
population -- will likely buy a new phone within the next six
months, according to a recent survey from market research company
Roy Morgan.

Of the six million potential buyers, half of them will be
first-time owners and 21 percent plan to replace or upgrade their
current phones, while another 13 percent plan to buy additional
ones.

Roy Morgan's survey suggests that cellular phone vendors, like
those in the Glodok electronic market and ITC Roxy Mas in West
Jakarta, should prepare an abundant stock of Nokia, Samsung and
Sony Ericsson handsets. Those three brands are in the top three
listed for consideration by potential buyers.

Finnish-brand Nokia -- popularly dubbed in the country as
handphone sejuta umat or the cell phone for a million folks --
has become the top choice as consumers say it is "a good quality
brand", "easy to use" and "good value for money".

"There are about 1.2 million people (in Indonesia), who
currently own a Nokia and intend to buy a new one in the next six
months. Two-thirds of them want to replace their current Nokia
models, while the remaining plan to buy an additional one," Roy
Morgan Research Manager Felicia Nugroho said.

Trailing Nokia in second and third place are South Korean-made
Samsung and Sony Ericsson, respectively. Respondents said their
consideration to pick these two brands were especially due to
"good value for money".

Now that cell phone vendors know what brands to sell, what
features should a cellular device have to appeal to over a
million potential buyers?

The survey shows that aside from the taken-for-granted
features such as colorful screens, an extended warranty,
voicemail and a hands-free facility, consumers also consider it
important for a handset to have games, a camera, a speaker phone
and an MP3 player.

Other features such as internet and e-mail capability, as well
as bluetooth and a global positioning system (GPS), meanwhile,
are considered less important.

According to Felicia, Roy Morgan data is based on a sample
size of 6,654 respondents across 16 provinces, which represents
87 percent of the Indonesian population aged 14 years and over.

Separately, the AC Nielsen Indonesia research firm joined
confirmed the data as its recent survey conducted in Jakarta
showed that consumers were attracted to cellular devices that had
several functions such as a camera, an MP3 player, games and a
large memory.

AC Nielsen Indonesia executive director Catherine Eddy said,
however, that despite the consumers' desire for such features,
the most common activities for phone use on a daily basis were
text messaging (87 percent), receiving calls (85 percent), calls
to other cellular phones (57 percent) and calls to fixed-line
phones (48 percent).

Nielsen also found that nearly one out of four consumers here
valued game-playing (24 percent) and listening to music (21
percent) as very important in a phone, while only 9 percent said
taking photos was a priority.

"People want to have the features but don't necessarily make
use of them," she said, adding that handsets and service
providers should develop better gaming and music features.

"A focus on integrating more sophisticated gaming and music
functionality could provide a competitive edge for handset and
service providers in the future," explained Catherine.

However, the service providers should not develop the two
features at the expense of the most important factor that local
consumers looked for when choosing a provider; that would be good
coverage.

Receiving (of phone calls and SMSes) is the biggest factor in
choosing a provider, with 93 percent of users interviewed by
Nielsen ranking "good coverage" as the most important factor in
their choice.

Moreover, new players should not be discouraged by the fierce
competition in the provider market, as Indonesian cellular phone
users displayed a distinct lack of loyalty with 54 percent
switching providers at some stage.

The switching crowd, according to Roy Morgan, within the next
six months plan to switch to SIM card brands such as Simpati
(41.5 percent) and Kartu AS (3.2 percent) provided by the largest
telecommunications company PT Telkomsel, Telkom Flexi (6.3
percent) from state company PT Telkom and Mentari (25.3 percent)
and IM3 Smart (4.8 percent) from PT Indosat.

The association of cellular service providers here expects
total subscriber numbers to reach 29 million by the end of this
year, compared to 25 million earlier this year.

Nielsen's research also shows that males are more likely to
view their phones as a time management and work contact tool
while females tend to rely on them much more for socializing or
organizing their social life.

Nearly all agree that the biggest benefits are being "able to
contact friends from wherever I am" and "for security reasons",
Catherine said.

Nevertheless, the biggest beneficiaries of all will likely be
the phone manufacturers and service providers, who are tapping
into a very lucrative market indeed, with even greater potential
for growth.